In our posts on the bankruptcy of Fluid Routing Solutions, we have discussed unique aspects of this case that made it worthy of study. These aspects include the following:
- apparent inability to get institutional financing despite strengths;
- sophistication of the overall bankruptcy strategy;
- first day motions that were specifically directed at keeping the supplier base in place;
- challenges of a bankruptcy of a supplier in the automotive sector;
- being part of the investment portfolio of a major, private equity player, Sun Capital Partners;
- DIP financing from a Sun Capital Partners affiliate;
- close scrutiny given the case by Chrysler, Ford and Toyota;
- presence of the UAW,
- speed at which the case was moving.
We have decided that this case is of such a nature that it is not an appropriate subject for a contemporaneous blog. The legal and ethical issues are too complex, the stakes are too high for suppliers and the case is going to move too fast for ongoing treatment in this blog. We will revisit the case from time to time at critical points to see how it has progressed.
We are concened about this case. In part, out concern arising out of information in public sources, including the proceedings in prior bankruptcy filings of companies in the Sun Capital Partners’ portfolio. We share the following citations to public sources and bankruptcy filings:
Sun Sets On Another Sun Capital Company, The Wall Street Journal, Bankruptcy Beat, January 22, 2009
Sun Capital Shifts Its Focus and Cuts Back, The New York Times, DealBook, January 7, 2009
Sun Capital co-founder defends firm’s role in Mervyns bankruptcy, PalmBeachPost.com, December 14, 2008
Sun Capital hits a bankruptcy trifecta, The Deal.com, July 30, 2008
Private Capital Symposium Video: Sun Capital’s Talarico and WL Ross’ Storper on distressed investing, May 14, 2008
Sun Capital Partners on hot seat, St. Louis Business Journal, Friday, March 14, 2008
Citations to Bankruptcy Filings:
Crafts Retail Holding Corp., et al. (Rag Shop Bankruptcy), Bankruptcy Petition #: 1-07-42272-jf, U.S. Bankruptcy Court Eastern District of New York (Brooklyn) (Chapter 11 filed 5/2/2007; converted to Chapter 7 on 11/7/2007; Bankruptcy Preference Actions Now Being Pursued)
Wickes Holdings, LLC and Wickes Furniture Company, Inc., Bankruptcy Petition #: 08-10212-KJC, U.S. Bankruptcy Court, District of Delaware (Delaware) (Chapter 11 filed 2/3/2008; Bankruptcy preference claims in process of being pursued by Unsecured Creditor Committee)
LV Liquidation Corporation (a/k/a Lillian Vernon Corporation), Bankruptcy Petition #: 08-10323-BLS, U.S. Bankruptcy Court, District of Delaware (Delaware) (Chapter 11 filed 2/20/2008)
Jevic Holding Corp. a/k/a Jevic Transportation, Bankruptcy Petition #: 08-11006-BLS, U.S. Bankruptcy Court, District of Delaware (Delaware) (Chapter 11 filed May 20, 2008)
Von Weise Gear Company, Bankruptcy Petition #: 09-10187-CSS (related cases 09-10182 through 09-10187), U.S. Bankruptcy Court, District of Delaware (Delaware) (Chapter 7 filed Januay 16, 2009)
Rowe Furniture, Inc. U.S., Bankruptcy Petition #: 06-11143-SSM Bankruptcy Court Eastern District of Virginia (Alexandria)(Chapter 11 filed 09/18/2006; converted to Chapter 7 on 2/21/2007; Preference Actions filed in 2008)